corporate greed

2007 and 2008 have proven to be a very trying financial time for most businesses and consumers. Mass media spends most of its energy talking about high fuel prices, grain prices skyrocketing, and other commodities seeing record level costs. But, what they don’t show is how Pawnbrokers, and Pay Day lenders having record profits during these last 5 quarters.

We always like to use some scandalous company as an example, so without further ado allow us to introduce to you Cash America International. The Company currently operates over 450 pawnshops in the United States under the brand names Cash America Pawn and SuperPawn. They also have a number of other businesses under the “Umbrella.” For future use, if you want to look them up on sec.gov, or nyse.com their ticker is CSH. We can list the officers of this company and point fingers to who are criminally in charge, but we will only mention that Jack R. Daugherty is the chairman of the board, and the ultimate decision maker.

Pawnbrokers have a long and somewhat troubled history. China has been known to have Pawnbrokers dating back 3000 years. “Trade for the pawnbrokers in the 1960’s and 1970’s was very slow and to make matters worse a series of complex legal regulations made pawnbroking an unattractive form of money lending. The demise of the pawnbroker altogether was a real possibility; the government changed this via pressure from the National Pawnbrokers Association and in 1974 introduced the Credit Consumer Act which simplified pawnbroking into a clear and concise form of money lending.” ^source The most tumultuous time as you see, was in the 1960’s and 1970’s. Legislation was relaxed, and this allowed pawnbrokers to increase the interest rates at which they charged the borrower. When this type of business was first introduced the interest rates were favorable to borrowers, usually not more than 3% per annum, there were tight restriction regulated by governments for the first 2970 years. Now interest rates through these loan sharks are on average 400%, talk about an inflated jump, here is a look at Cash Americas Rates.

We can speculate that most people who use Pawn Brokers, and Pay Day Lenders do so by circumstances out of their control. What would be nice is if the Pawn Brokers and Pay day Lenders be held accountable and show some restraint on the interest rates they charge. Since this is not likely to happen we would like to show some success stories on how to bite back at the business that financially rapes its community. James Strong, was a customer of Cash America International, and he decided he had enough of their criminal ways. James decided to take his fight to the courts. This litigious battle has been tied up for 5 years now. I guess it would be fair to say that Cash America is spending more in lawyer’s fees than they are in recouping the 200 dollars they claim that Mr. Cook owes. Mr. Cook initially filed his lawsuit using the usury law in Georgia. Usury laws state that any lending institution in said state cannot charge more than a certain amount (these amounts vary by state). To check your states usury law visit http://www.lectlaw.com/files/ban02.htm. In some states it is cut and dried, other states however, you really have to research the fallacies that are in place that allow this kind of loan shark business to operate. In Georgia, Mr. Cook found that even though Cash America is a national Lending institute, exempt from usury limits, the franchise owner was inevitably responsible for the charging of extraneous fees. Another facet that Mr. Cook and his Lawyers found was the use of the RICO law, here is the U.S. code. We will continue to follow this case as it progresses.

To wrap this up, if you are in such dire need for money, and you have use one of these types of business, just remember what James Cook is doing to fight back. We know that Jack R. Daugherty is not going to change his rates and the way he handles his business, so we offer you the some insight on how to take charge of the system. Furthermore, we ask as always, contact your State legislator and voice your opinion about these kinds of businesses. Ohio is a prime example of change, read the Attorney Generals Reform. You can make a difference.